rakuten left binance left net_left adver left

Snowflake Stock: Likely to Melt Before Soaring Again

Solid quarterly results released late last month have helped Snowflake (SNOW) stock get back on an upwards trajectory. Renewed interest in tech stocks has also given a boost to the...
Snowflake Stock: Likely to Melt Before Soaring Again © Reuters. Snowflake Stock: Likely to Melt Before Soaring Again

Solid quarterly results released late last month have helped Snowflake (SNOW) stock get back on an upwards trajectory. Renewed interest in tech stocks has also given a boost to the data cloud services provider's shares.

That said, a pullback may be on the horizon. Why? Even as Snowflake's underlying business grows at a rapid rate, at today’s valuation, this growth is more than accounted for in the stock price.

As long as it continues to grow at an above-average clip, it’s doubtful that shares will fall to value stock territory. However, if markets correct in the coming months? It may fall to a price that’s more reasonable, based on its long-term growth projections. (See SNOW stock charts on TipRanks)

In short, I’m neutral on the stock right now, given that the near-term risk of a change in market sentiment outweighs the chance of it going back to its all-time high of $429 per share.

SNOW Stock and its Recent Strong Earnings

As seen in its latest quarterly earnings results (released on August 25), Snowflake continues to beat expectations. Revenues for its fiscal second quarter (ending July 31) soared 104% year-over-year, to $272.2 million. This was above sell-side estimates calling for $256.5 million in revenue.

Losses for the company came in lower than expected. It even upped its guidance for the full fiscal year (ending January 2022). These quarterly results were well-received by the market in general, as well as the sell-side community.

Analysts who were bullish on the stock, despite its rich valuation, increased their price targets, thanks to the strong results. The most bullish was FBN Securities’ Shebly Seyrafi, who raised his price target from $350 to $375 per share.

For the most part though, valuation worries are weighing on the sell-side’s sentiment. The average analyst price target (more below) is basically at current trading levels.

Does that mean shares will hold steady from here? Not exactly. A gradual move higher may be in the cards, if markets remain strong. Yet, as correction fears loom, investors should expect some sort of correction or pullback instead.

Market Changes, Not Results, Will Knock Snowflake Back Down

SNOW's rate of expansion will slow down at some point, but that’s not happening anytime soon.

Between increased demand from its existing customer base, untapped markets like services to the U.S. government, as well as a long growth runway in markets outside of the U.S., Snowflake appears primed to continue growing at above-average levels through the rest of the decade.

With this, chances are it won’t be underwhelming results that knock SNOW stock back down to lower prices. Instead, it’ll be changes in market conditions.

What could cause this? One possible driver could be the U.S. Federal Reserve’s planned tapering of its bond purchase program, which has helped encourage investment in stocks. If the outbreak of COVID-19’s Delta variant worsens, this could cause turmoil for the market as well.

Such an outcome could affect richly priced tech growth stocks like this one the hardest. Trading for 83.6x its estimated sales for this fiscal year, its valuation could contract in a big way, while continuing to reflect on its long-term growth potential.

Wall Street's Take

According to TipRanks, SNOW stock has a consensus rating of Moderate Buy. Out of 19 analyst ratings, nine rate it a Buy, 10 rate it a Hold, and none rate it a Sell.

The average Snowflake price target is $313.47, implying 1.6% downside potential. Analyst price targets range from a low of $275 per share, to a high of $375 per share.

Staying Neutral Best Move for Now

The risk of a market downturn makes Snowflake shares seem unappealing at today’s prices. That’s not necessarily a call to avoid it completely, though.

The company has plenty of place to keep growing at an above-average pace. It may just well hit its aggressive annual product revenue target of $10 billion by 2029.

The issue today, though, is that SNOW stock is more likely to fall due to meltdown, than to continue to gradually move to higher prices.

Disclosure: At the time of publication, Thomas Niel did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

ig right nyse right Neteller adver right
APPROVED BROKERS
Row 1 Left net_home_top Row 1 Right Row 2 Left Row 2 Center Row 2 Right Main Right TOP 07 Main Right TOP 06 Main Right TOP 05 Main Right TOP 04 Main Right TOP 03 Main Right TOP 01
28-09-2021 01:52:10 (UTC+7)

EUR/USD

1.1705

-0.0009 (-0.08%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (4)

Sell (1)

EUR/USD

1.1705

-0.0009 (-0.08%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (4)

Sell (1)

GBP/USD

1.3714

+0.0032 (+0.23%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (4)

Sell (3)

USD/JPY

110.96

+0.24 (+0.22%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (5)

AUD/USD

0.7289

+0.0031 (+0.42%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (2)

Sell (5)

USD/CAD

1.2617

-0.0035 (-0.28%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (3)

Sell (3)

EUR/JPY

129.88

+0.17 (+0.13%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

EUR/CHF

1.0833

+0.0010 (+0.10%)

Summary

Neutral

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (3)

Sell (2)

Gold Futures

1,751.20

-0.50 (-0.03%)

Summary

Neutral

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (7)

Sell (1)

Silver Futures

22.672

+0.247 (+1.10%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

Copper Futures

4.2845

-0.0010 (-0.02%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (8)

Crude Oil WTI Futures

75.27

+1.29 (+1.74%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (1)

Sell (7)

Brent Oil Futures

78.49

+1.26 (+1.63%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (1)

Sell (7)

Natural Gas Futures

5.700

+0.500 (+9.62%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (2)

Sell (5)

US Coffee C Futures

194.98

+0.63 (+0.32%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (5)

Sell (0)

Euro Stoxx 50

4,165.48

+6.97 (+0.17%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (9)

S&P 500

4,450.00

-5.48 (-0.12%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (6)

DAX

15,573.88

+42.13 (+0.27%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

FTSE 100

7,063.40

+11.92 (+0.17%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (7)

Hang Seng

24,208.78

+16.62 (+0.07%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

US Small Cap 2000

2,294.05

+40.17 (+1.78%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (9)

IBEX 35

9,002.90

+129.80 (+1.46%)

Summary

Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (4)

Sell (2)

BASF SE NA O.N.

64.740

+1.040 (+1.63%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (5)

Bayer AG NA

47.47

+0.99 (+2.13%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Allianz SE VNA O.N.

196.19

+3.85 (+2.00%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (2)

Adidas AG

278.80

-2.77 (-0.98%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (10)

Deutsche Lufthansa AG

6.561

+0.328 (+5.26%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (7)

Sell (2)

Siemens AG Class N

147.27

-0.84 (-0.57%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (10)

Deutsche Bank AG

11.120

+0.285 (+2.63%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (5)

Sell (3)

 EUR/USD1.1705↑ Buy
 GBP/USD1.3714Neutral
 USD/JPY110.96↑ Sell
 AUD/USD0.7289↑ Sell
 USD/CAD1.2617Neutral
 EUR/JPY129.88↑ Sell
 EUR/CHF1.0833Neutral
 Gold1,751.20Neutral
 Silver22.672↑ Sell
 Copper4.2845↑ Sell
 Crude Oil WTI75.27↑ Sell
 Brent Oil78.49↑ Sell
 Natural Gas5.700Neutral
 US Coffee C194.98↑ Buy
 Euro Stoxx 504,165.48↑ Sell
 S&P 5004,450.00↑ Sell
 DAX15,573.88↑ Sell
 FTSE 1007,063.40↑ Sell
 Hang Seng24,208.78↑ Buy
 Small Cap 20002,294.05↑ Sell
 IBEX 359,002.90Buy
 BASF64.740↑ Sell
 Bayer47.47↑ Buy
 Allianz196.19↑ Buy
 Adidas278.80↑ Sell
 Lufthansa6.561↑ Buy
 Siemens AG147.27↑ Sell
 Deutsche Bank AG11.120↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,665/ 5,715
(0/ 0) # 900
SJC HCM5,635/ 5,700
(0/ 0) # 885
SJC Hanoi5,635/ 5,702
(0/ 0) # 887
SJC Danang5,635/ 5,702
(0/ 0) # 887
SJC Nhatrang5,635/ 5,702
(0/ 0) # 887
SJC Cantho5,635/ 5,702
(0/ 0) # 887
Cập nhật 28-09-2021 01:52:12
Xem lịch sử giá vàng SJC: nhấn đây!
ↀ Giá vàng thế giới
$1,751.11+1.620.09%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2204022480
RON 95-II,III2194022370
E5 RON 92-II2071021120
DO 0.05S1658016910
DO 0,001S-V1693017260
Dầu hỏa1564015950
ↂ Giá dầu thô thế giới
WTI$75.14-0.45-0.60%
Brent$78.50-0.49-0.63%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.630,0022.860,00
EUR25.993,7727.346,60
GBP30.324,2231.591,18
JPY200,45212,05
KRW16,7520,39
Cập nhật lúc 18:54:42 27/09/2021
Xem bảng tỷ giá hối đoái
binance main right Fxpro aetos main right adver main right